New York's C(O.Sub.2) Cap-and-Trade Program: Regulating Climate Change without Climate Change Legislation

Article excerpt

I. INTRODUCTION

In 2005, New York joined six other states in announcing their plan to implement the Regional Greenhouse Gas Initiative ("RGGI"), the first ever mandatory cap-and-trade program for carbon dioxide. (1) Cap and trade refers generally to regulatory programs that set an overall emissions cap and then allocate allowances, or portions of that cap, to emitters. (2) Those emitters must hold enough allowances to cover the actual amount of C[O.sub.2] emitted during a compliance period. (3) The participating states signed a memorandum of understanding agreeing to implement the RGGI and began the rulemaking process to implement the RGGI regulations within each of their states. (4) With the exception of New York, each of the RGGI states enacted or modified legislation specifically to provide for the implementation of the RGGI. (5) In contrast, New York is implementing its RGGI program, known as the C[O.sub.2] Budget Trading Program, by the promulgation of regulations by the New York State Department of Environmental Conservation ("DEC") through its authority under the Air Pollution Control Act (the "Act"). (6) Public comments received by the DEC on the draft RGGI regulations questioned the DEC's authority to regulate carbon dioxide emissions through the proposed cap-and-trade program without authorization from the legislature. (7) Furthermore, one of the regulated entities filed suit against the DEC (among other defendants), alleging among other things that the DEC's promulgation of the RGGI regulations was ultra vires.

This note analyzes the DEC's statutory authority to implement the C[O.sub.2] Budget Trading Program under its authority to regulate air pollution provided by the Act. The landmark case of Boreali v. Axelrod (8) provides the framework for this analysis. The outcome of the Boreali analysis turns primarily on whether or not carbon dioxide can be classified as an air pollutant. Finding that this classification is reasonable, this note concludes that the DEC does in fact have the statutory authority to implement the Regional Greenhouse Gas Initiative.

Part I provides background information regarding the growing sense of crisis over climate change, including the development in recent years of a scientific consensus that humans are changing the earth's temperature and the increasing public pressure to take steps to address climate change. Part II provides an overview of one of the major efforts to address climate change in the United States-the Regional Greenhouse Gas Initiative--and in particular, New York's RGGI program, known as the C[O.sub.2] Budget Trading Program. In addition, Part II details the basis of the challenge to the New York State Department of Environmental Conservation's authority to implement the C[O.sub.2] Budget Trading Program. Part III provides an overview of the Boreali approach to analyzing whether an administrative agency has exceeded its statutory authority, and applies each of the four Boreali factors to the DEC's exercise of its regulatory powers to implement the C[O.sub.2] Budget Trading Program. Finally, Part IV summarizes the results of the Boreali analysis and concludes that the DEC does in fact have the statutory authority to implement the RGGI under the Air Pollution Control Act.

II. THE EMERGING CRISIS OF CLIMATE CHANGE

Growing consensus among scientists that the earth's climate is changing has, over the past few years, resulted in great concern among policy makers and the public over the anticipated impacts of climate change and the role that humans are playing in causing or accelerating climate change. In 2007, the Intergovernmental Panel on Climate Change ("IPCC") concluded that "[w]arming of the climate system is unequivocal." (9) The United States Supreme Court echoed that concern in its landmark decision of Massachusetts v.

EPA. (10) In fact, data suggest that climate change is already impacting the environment. …